GENEVA (AFP) – – World trade volumes are expected to drop by an average of nine percent in 2009, the sharpest fall since World War II, the World Trade Organisation said Monday.
But the WTO said in its latest forecast for global trade flows that data from key Asian traders like China last month suggested that the worst of the global trade decline may be over soon.
“The collapse in global demand brought on by the biggest economic downturn in decades will drive exports down by roughly nine percent in volume terms in 2009, the biggest such contraction since the Second World War,” the forecast said.
Trading volumes of the developed economies should contract 10 percent this year, while trade in developing economies should slip 2 to 3 percent.
Despite the dismal projections for the full year, the WTO pointed out that import data for China, Singapore, Taiwan and Vietnam turned positive in February following successive months of decline.
China posted an increase of 17 percent in imports compared to January, while Singapore posted growth of one percent.
“While this is only a single month of data, and should therefore be interpreted cautiously, it could be evidence of slowing decline and perhaps a ‘bottoming out’ of negative trade growth trends,” said the report.
In Vietnam, February imports were up 32 percent compared to January, which in turn was down 38 percent from December 2008.
February imports in Taiwan gained 22 percent over January, a sharp reversal from the 24 percent in January compared to December.
Year-on-year comparisons of trade data are usually deemed more accurate as they factor in seasonal effects such as festive holidays.
But in this instance, after consecutive months of sharp decline, analysts have been watching for the point of reversal.
In 2008, world trade growth reached 2 percent, but it “tapered off in the last six months,” said the WTO.
The WTO added that it was “implausible” that trade volumes could continue to fall at the rate they been declining in the past few months.
Citing China as an example, the WTO noted that if the downturn were extrapolated according to recent export figures, then “China’s exports would be approaching zero within ten months to a year”.